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CPP demonstrates continued growth in half-year results

Jason Walsh, chief executive officer of Leeds-based CPP Group.
Jason Walsh, chief executive officer of Leeds-based CPP Group.

CPP Group plc, the Leeds-based financial security product provider, has announced a sharp upturn in revenue in the first half of the year.

The 18 per cent increase on the same period in 2017 (on a constant currency basis) came thanks to strong performance in overseas markets, especially India and Turkey.

Over the same six months, worldwide customer numbers also increased by 23 per cent to 6.7 million.

CEO Jason Walsh said: “The revenue growth that we saw in 2017 and which has continued in the first half of 2018 has laid the foundation for further growth. We have continued to invest in expanding our product and service capability, whilst the restructuring activities that we have commenced in our EU markets demonstrate the importance we place on operating efficiently and managing our cost base.

“We are delivering against our strategic plan and expect to continue this good progress.”

The growth in revenue has allowed the business to pursue significant market expansion, investing in new UK business and entering Bangladesh for the first time.

“Our focus is on the UK and Bangladesh, but we’re also looking into where else we can go to in Asia, such as Indonesia, the Philippines, Taiwan, Vietnam and South Korea,” Mr Walsh told The Yorkshire Post.

He added: “We’re not ruling out further expansion in North America; we’ve already got an operation in Mexico that we’ve been investing heavily in.”

The group reported that revenue increased to £51.3m, up from £45.3m in the first half of 2017, including 36 per cent growth to £40m from ongoing operations. CPP’s operations in India increased revenue by 60 per cent, from £19.2m to £28.3m.

Over the last year, CPP, which has 550 permanent staff, has reduced the headcount at its head office in Leeds from around 100 to just 35, although it still has around 150 employees in York.

“We want to create a support centre for the individual markets, without pretending to know all about those markets; the people who know best about, say, the Indian market are in India,” said Mr Walsh.

Alongside the revenue growth and expansion into new territories, the company has kicked off a restructuring project to further develop its EU hub in Madrid, which has responsibility for customer service operations in Germany, Italy, Portugal and Spain.

“We wanted to create a much more efficient operating model across our European operations, so we’ve streamlined them by grouping together a lot of our back-office functions into one hub, while keeping our sales and commercial functions in our individual markets,” said Mr Walsh.

Underlying operating profit reduced from £1.8m in the first half of 2017 to £1.4m in 2018 following investment in business growth projects, but the underlying profit margin, before investment costs of £1.2m, has increased from 4 per cent to 5 per cent.

CPP recently agreed to take a controlling stake in Globiva Services Private Limited, a business process management company based in India. Earlier this year CPP bought Valeos, a specialist consultancy servicing the insurance sector, and it has also invested £1.2m in Kynd, an SME-orientated cyber-security start-up.

These deals are part of a strategy to rapidly expand the group’s product portfolio for the financial services sector.

CPP’s current products include OwlDetect, which helps customers stay safe online by constantly scanning the dark web to check whether their personal details have been stolen.

Another, Lasu, uses Bluetooth to link a customer’s phone and wallet; if the wallet is accidentally left somewhere, an alert is sent to their phone, so they can go back and collect it or cancel their cards.